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| China accuses US of 'trade bullyism' as tariffs kick in – business live | China accuses US of 'trade bullyism' as tariffs kick in – business live |
| (35 minutes later) | |
| The FTSE 100 index has opened lower, trading down 0.26% (nearly 20 points) at 7470.16. | |
| Shares in broadcaster Sky have jumped 9% to £17.22. US cable-TV giant Comcast won the auction for Europe’s biggest pay-TV group at the weekend, outbidding Rupert Murdoch’s Twenty-First Century Fox with a £17.28 a share offer. | |
| Our media editor Jim Waterson writes: | |
| Rupert Murdoch’s dream of taking full control of Sky dissolved on Saturday night as he was outbid by the US firm Comcast. But anyone celebrating a setback for the mogul should be warned. The most divisive figure in Britain’s media may still have the last laugh. | |
| However, for now the pound is up, trading above $1.31 (up nearly 0.3%) after Brexit minister Dominic Raab expressed confidence that the government will get to a Brexit deal in the end, although he also said it was ready and prepared to deal with the risks of a no-deal outcome. | |
| Hussein Sayed, chief market strategist at online broker FXTM, has sent us his thoughts on trade and sterling: | Hussein Sayed, chief market strategist at online broker FXTM, has sent us his thoughts on trade and sterling: |
| Politics and trade tensions are expected to be the key market drivers this week. While [the tariffs] seem to be already priced in, investors are becoming increasingly worried that the trade war may enter phase III. With Beijing cancelling planned trade talks on Saturday and the US State Department imposing sanctions against China’s defence agency, relations between the two largest economies in the world may further deteriorate. | Politics and trade tensions are expected to be the key market drivers this week. While [the tariffs] seem to be already priced in, investors are becoming increasingly worried that the trade war may enter phase III. With Beijing cancelling planned trade talks on Saturday and the US State Department imposing sanctions against China’s defence agency, relations between the two largest economies in the world may further deteriorate. |
| While markets in mainland China, Japan, and South Korea are shut for a public holiday, investor skepticism was reflected in Hong Kong stocks and commodity currencies which fell in early Monday trade. Whether the pain will begin reflecting in Wall Street depends on what happens next. If President Trump follows through on his promises to impose further tariffs on the remaining $267 billion of Chinese imports, investors may consider it as a signal to move out of US equities. | While markets in mainland China, Japan, and South Korea are shut for a public holiday, investor skepticism was reflected in Hong Kong stocks and commodity currencies which fell in early Monday trade. Whether the pain will begin reflecting in Wall Street depends on what happens next. If President Trump follows through on his promises to impose further tariffs on the remaining $267 billion of Chinese imports, investors may consider it as a signal to move out of US equities. |
| Sterling has recovered a bit this morning, trading up 0.2% at $1.3106 against the dollar. | Sterling has recovered a bit this morning, trading up 0.2% at $1.3106 against the dollar. |
| Sayed says: | Sayed says: |
| Markets thought that we might finally be seeing a Brexit breakthrough at the Salzburg Summit on Friday. Instead, the summit increased the chance of a no-deal Brexit as EU leaders slammed Theresa May’s Chequers Brexit proposal with the Irish border remaining a key barrier to a deal. With no tier one economic data on the calendar, expect GBPUSD to weaken further this week with a possible test below $1.3. | Markets thought that we might finally be seeing a Brexit breakthrough at the Salzburg Summit on Friday. Instead, the summit increased the chance of a no-deal Brexit as EU leaders slammed Theresa May’s Chequers Brexit proposal with the Irish border remaining a key barrier to a deal. With no tier one economic data on the calendar, expect GBPUSD to weaken further this week with a possible test below $1.3. |
| It feels quite autumnal this morning, but Thomas Cook is still suffering the effects of the heatwave across northern Europe. The travel giant has issued a profit warning, cutting its 2018 profit outlook by 13%. It has blamed the heatwave for more discounting and tougher competition. | It feels quite autumnal this morning, but Thomas Cook is still suffering the effects of the heatwave across northern Europe. The travel giant has issued a profit warning, cutting its 2018 profit outlook by 13%. It has blamed the heatwave for more discounting and tougher competition. |
| The company’s shares crashed 18% when the stock market opened. | The company’s shares crashed 18% when the stock market opened. |
| The long run of hot weather (Britain’s joint-longest heatwave on record) encouraged more people in Britain, Germany and Scandinavia to stay at home or holiday in their own country, rather than head to warmer countries in southern Europe. The warm weather is also affecting bookings for winter holidays. | The long run of hot weather (Britain’s joint-longest heatwave on record) encouraged more people in Britain, Germany and Scandinavia to stay at home or holiday in their own country, rather than head to warmer countries in southern Europe. The warm weather is also affecting bookings for winter holidays. |
| Thomas Cook said: | Thomas Cook said: |
| The slowdown in customer bookings during June and July extended into August, leading to higher than normal levels of promotional activity. | The slowdown in customer bookings during June and July extended into August, leading to higher than normal levels of promotional activity. |
| The tour operator now expects underlying operating profits to come in at £280m rather than the previously estimated £323m to £355m in the 12 months to 30 September. Rival Tui has stuck to its forecasts. | The tour operator now expects underlying operating profits to come in at £280m rather than the previously estimated £323m to £355m in the 12 months to 30 September. Rival Tui has stuck to its forecasts. |
| While the Labour party is meeting in Liverpool, Theresa May faces a tense meeting in Downing Street today, amid intense pressure from leading Brexiters in her party to change course and seek a simpler, less ambitious deal. Key elements of the prime minister’s Chequers deal were rejected by EU leaders at last week’s humiliating summit in Salzburg. | While the Labour party is meeting in Liverpool, Theresa May faces a tense meeting in Downing Street today, amid intense pressure from leading Brexiters in her party to change course and seek a simpler, less ambitious deal. Key elements of the prime minister’s Chequers deal were rejected by EU leaders at last week’s humiliating summit in Salzburg. |
| Big Brexit day in westminster - May has to face Cabinet after Salzburg mess and IEA right wing think tank putting forward another plan (quite a lot of it is familiar stuff) | Big Brexit day in westminster - May has to face Cabinet after Salzburg mess and IEA right wing think tank putting forward another plan (quite a lot of it is familiar stuff) |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| The new tariffs imposed by the US and China on each other’s goods went into effect on Monday, as the bitter trade dispute deepened. Soon after, Beijing accused Washington of engaging in “trade bullyism,” the official Xinhua news agency reported. | The new tariffs imposed by the US and China on each other’s goods went into effect on Monday, as the bitter trade dispute deepened. Soon after, Beijing accused Washington of engaging in “trade bullyism,” the official Xinhua news agency reported. |
| But Beijing also said it was willing to restart trade negotiations with Washington if the talks are “based on mutual respect and equality”. | But Beijing also said it was willing to restart trade negotiations with Washington if the talks are “based on mutual respect and equality”. |
| The US tariffs on $200bn of Chinese goods and China’s retaliatory tariffs on $60bn of US imports took effect at midday in Asia (5am BST), although the level was not as high as feared earlier. The US opted for 10% tariffs (initially - they go up to 25% by the end of the year) while China’s duties vary between 5% and 10%. The trade dispute started in the early summer when trade talks broke down and the world’s two biggest economies slapped duties on $50bn of each other’s goods in July. | The US tariffs on $200bn of Chinese goods and China’s retaliatory tariffs on $60bn of US imports took effect at midday in Asia (5am BST), although the level was not as high as feared earlier. The US opted for 10% tariffs (initially - they go up to 25% by the end of the year) while China’s duties vary between 5% and 10%. The trade dispute started in the early summer when trade talks broke down and the world’s two biggest economies slapped duties on $50bn of each other’s goods in July. |
| Economists have been warning about the impact on growth not just in the US and China, but the wider global economy. | Economists have been warning about the impact on growth not just in the US and China, but the wider global economy. |
| The US tariffs spare some gadgets such as smartwatches and speakers, while home modems, routers and internet gateways are included. | The US tariffs spare some gadgets such as smartwatches and speakers, while home modems, routers and internet gateways are included. |
| Reuters reports: | Reuters reports: |
| The move will effectively create a two-tiered tariff structure for consumer internet, with many products, such as Fitbit fitness trackers, Apple’s watch and Amazon.com’s Echo smart speaker being favored over routers and internet gateways from Arris International, Netgear, D-Link and others. | The move will effectively create a two-tiered tariff structure for consumer internet, with many products, such as Fitbit fitness trackers, Apple’s watch and Amazon.com’s Echo smart speaker being favored over routers and internet gateways from Arris International, Netgear, D-Link and others. |
| “We’re operating under the assumption that the tens of millions of devices that deliver high-speed internet into consumers’ homes will be impacted by these tariffs,” said Jim Brennan, Arris’ senior vice president of supply chain, quality and operations. | “We’re operating under the assumption that the tens of millions of devices that deliver high-speed internet into consumers’ homes will be impacted by these tariffs,” said Jim Brennan, Arris’ senior vice president of supply chain, quality and operations. |
| “It feels anti-consumer because our devices are what enables the core of consumer tech,” Brennan told Reuters. | “It feels anti-consumer because our devices are what enables the core of consumer tech,” Brennan told Reuters. |
| The pound also remains in focus, with the party conference season in full swing. Michael Hewson, chief market analyst at CMC Markets UK, says: | The pound also remains in focus, with the party conference season in full swing. Michael Hewson, chief market analyst at CMC Markets UK, says: |
| The pound had a dreadful week last week despite hitting a two-month high against the US dollar. The breakdown in relations between the UK and EU leaders in Salzburg last week, and Prime Minister Theresa May’s punchy statement on Friday could well be described as the usual political theatre that we’ve all become accustomed to in the past couple of years, however markets appear to be deciding that with the March 2019 deadline looming, the room for political manoeuvre appears to be getting smaller. | The pound had a dreadful week last week despite hitting a two-month high against the US dollar. The breakdown in relations between the UK and EU leaders in Salzburg last week, and Prime Minister Theresa May’s punchy statement on Friday could well be described as the usual political theatre that we’ve all become accustomed to in the past couple of years, however markets appear to be deciding that with the March 2019 deadline looming, the room for political manoeuvre appears to be getting smaller. |
| This has led to the not unreasonable conclusion that the risks of a political, as well economic dislocation have increased, particularly since both the UK government, and so-called opposition parties appear to be more concerned about their own internal squabbles, than actually doing what is best for the people they claim to represent. | This has led to the not unreasonable conclusion that the risks of a political, as well economic dislocation have increased, particularly since both the UK government, and so-called opposition parties appear to be more concerned about their own internal squabbles, than actually doing what is best for the people they claim to represent. |
| With party conference season now in full swing there is likely to be little of consequence that is likely to be construed as positive for sterling, as both Labour this week, and the Conservative’s next week look to shore up their base support, with equally economically incoherent policies. | With party conference season now in full swing there is likely to be little of consequence that is likely to be construed as positive for sterling, as both Labour this week, and the Conservative’s next week look to shore up their base support, with equally economically incoherent policies. |
| Pound under a bit of pressure this morning but GBPUSD still holding for now above Friday's low around 1.3050, set after the plunge: pic.twitter.com/SoSIkb3Ta1 | Pound under a bit of pressure this morning but GBPUSD still holding for now above Friday's low around 1.3050, set after the plunge: pic.twitter.com/SoSIkb3Ta1 |
| The Agenda | The Agenda |
| 9am BST German Ifo business climate survey | 9am BST German Ifo business climate survey |
| 11am BST CBI Industrial Trends survey | 11am BST CBI Industrial Trends survey |